The Earnings Recession Deepens

With the fourth quarter earnings season almost completed, Q4 Earnings per Share (EPS) for the S&P500 are down 3.3% year over year (YoY), making this the third consecutive quarter of declining YoY earnings.

Attention now shifts to Q1 2016 where things are going from bad to terrible. According to Factset, the YoY Q1 EPS consensus has fallen from the +5% increase expected on September 25, to a -7.4% plunge (even worse according to Bloomberg).

But while Q1 EPS expectations are crashing, full year 2016 EPS are still projected to be up 1.9% thanks to another Wall Street hockey stick miracle: somehow, consensus expects the growth rates for Q3 2016 and Q4 2016 to be +4.7% and +9.4%. Don’t hold your breath. It’s not going to happen.

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Who is Wayne Wile?

Wayne Wile is an international investment advisor with more than five decades of experience in wealth management. He has spent the majority of his career working with institutional and high net worth investors, seeking to mitigate risk while optimizing portfolio performance.

Wayne began work in the mailroom of a brokerage firm when he was 17 years of age and rose to a senior executive position. He was recruited for key jobs with several nationally recognized investment firms in Canada before striking out on his own.

Wayne’s methods as a trader are governed by simplicity and self-discipline. He says that losses are the children of greed and fear while profits are the spawn of patience and trend-following. “Time is always on your side. Let the market tell you what it wants to do and keep it company. Never chase an idea you think you have missed. There is always another one coming along.”

Wayne is especially opposed to sophisticated trading strategies that try to predict the future based on mathematical analysis of historical data. “These systems routinely destroy far more wealth than they create,” he says. “Only a highly intelligent, well-educated individual would be foolish enough to do this stuff. Successful traders need to stop analyzing and learn to listen to what the market is telling them every day.”

Wayne resides in the Cayman Islands but considers himself a citizen of the world.